Michael Hodder and Q. David Bowers
The Silver Fields of Utah
The Coinage Act of 1873 effectively demonetized silver, as no provision had been made in it for a silver dollar. The immediate impact of the legislation on the newly-opened mines in Bingham Canyon was disastrous, and in the country-wide Panic of 1873 many western mines closed or went bankrupt. Two of these latter, the Nez Perces Chief and the NoYou-Don't, were sold to the Cleveland group, which then hired Liberty to manage them as superintendent, as noted earlier. Despite the prevailing economic climate, which was not favorable to new venture capital projects, the discovery of a new galena body in 1874 encouraged the new owners that the mine could be made profitable. Title to the new find of ore was disputed by one of General Connor's "soldier claims" of 1865, but a local court settled the case in favor of the Cleveland group.
The details and facts concerning the mining venture from 1874 to 1878 and Liberty's role in securing ownership of the company in 1876 are still a matter of controversy among historians. Nearly a quarter of a century afterward the events surrounding Liberty's takeover of the property were still fresh enough to lend ammunition to his political and business rivals' accusations against him. Liberty told a friend and employee in 1900 that the accusations were based on old court cases, all of which were settled in his favor. We know that this assertion was not true, so we can imagine that the events of 1874-1878 still caused him embarassment, and that he felt he had, perhaps, done something questionable, even if it were legal.
The new ore deposit found in 1874 was not enough, apparently, to make the venture very profitable to the new owners of the Nez Perces Chief and NoYou-Don't mines. This was another reason for their sending Liberty out to superintend the mines, as he had a record of success elsewhere. What Liberty knew and when he knew it is a moot question now, but it may be significant that once he had acquired ownership of the mines he announced the discovery of yet another, even bigger, deposit of silver-bearing galena. This is slightly ahead of our story, however.
Liberty's employers were discouraged that their mines were not making for them the fortunes they expected. Additionally, the depression in the silver mining business showed no signs of im-proving. The Cleveland group began looking for a way out of its investment, to cut their losses before they grew bigger, but was not yet ready, in 1876, to sell out entirely. According to an account, published in the Deseret News of August 26, 1913, some sort of scare story caused the "easterners" as the paper called them, to decide to unload their shares of stock in the company very quickly. What the story was is unknown, but the Cleveland group later claimed they heard it from Liberty himself and that it was told to depreciate the apparent value of their stock by misrepresenting fact.
The rest of the story can best be told in the Deseret News words. Liberty was nicknamed "The Professor" by the miners in Bingham Canyon, since he never abandoned his pedagogical frame of mind, and the name stuck.
Professor Holden came into prominence in the early activities of Utah through a lawsuit which involved the stock of the Old Jordan Mining Company. The suit, which was won in the end by Professor Holden, attracted at the time almost nationwide attention because of the million and more dollars involved, the questions upon which the suit was based, and the fact that the plaintiffs were eastern people representing large capital.
In the late 70's, Professor Holden was superintendant of the Jordan Mining Company [sic] operating in the Bingham District, the mine showing a valuable output. Through some sort of scare, the eastern interests became keenly desirous of disposing of their holdings, and Mr. Holden offered a plan of buying. The stock was to be placed in escrow with W.S. McCornick, banker, and payments were to be made at intervals to Mr. Holden. After the last payment had been made, and the stock delivered, the former holders brought suit against Mr. Holden to recover the stock, alleging that it had been obtained by deception as to the value of the mine.
The suit was long drawn out but was finally won by Mr. Holden, a feature of the testimony in favor of the defendant being a letter received by Mr. McCormick from the eastern stockholders at the time of the final settlement which expressed the hope that Holden would "make his pile:"
During the trial many characteristic utterances and answers were made by Mr. Holden, many of which are remembered to this day. He proved to be a most ready-witted and at times baffling witness. At one point in the proceedings when under severe fire of cross-examination, in response to a question from the opposing counsel as to whether or not Mr. Holden did not think himself selfish, the answer was flashed back: "Yes, of all my mother's sons, I love myself the best:"
Information gained from other sources indicates there were actually two suits brought against Liberty by the Cleveland group that first sent him to Utah. The first was brought in 1878, following the passage of the Bland-Allison Act, the silver purchase provisions of which suddenly made silver mines look profitable again. As the just-quoted 1913 article noted, Liberty indeed won this case. The paper was wrong, however, when it said the mines showed a valuable output, as they were struggling at the time Liberty first arrived in Utah. They only began showing a valuable output after Liberty had finally acquired control of their stock. Additionally, the Old Jordan Mining Company was Liberty's creation and not the name of the original Clevelanders' venture.
The second suit against Liberty followed shortly after the first.
The grounds of the second complaint were different, but the underlying issue was the same, namely, ownership of the now valuable silver mine stock. Liberty lost this case, and with it the ownership of the Nez Perces Chief and NoYou-Don't mines, but not in the way one would expect, and not forever, either. After losing the suit Liberty appealed to the federal courts, which issued a stay of execution on the judgment of the state court that had found against him. The share certificates were not sequestered, however. Pending assumption of the appeal by the federal court Liberty sold ownership of the two mines to a French company formed for the purpose of buying them, Societe des Mines d'Argent et Fonderies de Bingham.
Whether Liberty believed that the granting of his appeal overturned the lower court's judgment, thus giving him clear title to the mines and the right to sell them if he pleased, or whether he believed that by selling to a foreign company the issue of rightful possessionwould have to be adjudicated before legal ownership could be determined (thus creating what would have to be lengthy delays in the suit brought by the absentee plaintiffs), is unknown since he did not publicly discuss the controversy later in life. However, when word of the sale reached his former employers and the state and federal court, the worst interpretation was put on his behavior. After some discussion, perhaps heated at times, a compromise was effected. The French company was made the rightful possessor and owner of the Nez Perces Chief and No You-Don't mines, and Liberty agreed to pay the Cleveland group $200,000 in settlement of their claims against him. Liberty dropped his appeal of the case he lost, and the Clevelanders agreed to hold him blameless in the future for his actions.
In 1899 Liberty's mining interests were consolidated, and ownership was vested in the United States Mining Company, formed by Liberty's son Albert Fairchild Holden. The first act of the new holding company was to buyout the Societe des Mines, thereby regaining ownership of Liberty's first two silver mines.